Does life insurance for children really make sense?
- Life insurance provides important insurance protection.
- I do not have life insurance for my children.
- Buying life insurance coverage for children often doesn’t make financial sense.
Life insurance provides very important protection. In my family, we have life insurance for both myself and my husband. However, we do not have life insurance for my two children – despite the fact that we usually err on the side of buying a significant amount of insurance coverage to protect our assets.
The lack of policies for children is not an omission. We deliberately chose not to buy life insurance on either our son or daughter. And that’s because we don’t believe that buying this type of policy is a good investment.
That’s why we don’t think life insurance for children makes sense
Life insurance for children can be purchased separately from a stand-alone insurer or can be purchased as an add-on to a parent’s policy. Usually, parents or grandparents buy this coverage for their children. This is different from a standard policy purchased by an adult, as adults usually buy coverage for their own life to protect their family.
Typically, when a life insurance policy is purchased for children, it is a whole life policy that is intended to remain in effect indefinitely. Parents can pay for the cover until the children are adults, after which they can take over the cover premiums to keep the policy intact. And like most whole life insurance plans, the policy can serve as an investment vehicle that gains cash value. The coverage will also not end until the premiums are paid.
But there are a few issues that make us believe it’s not worth purchasing this type of coverage.
Primarily, life insurance is intended to replace the income that a deceased person provided or valuable services that a deceased person provided – such as a stay-at-home mother caring for children.
Our children, as much as we love them, don’t really bring any money into our household or provide any services that we would need to hire someone to do if something were to happen to them. In fact, they cost us money instead of bringing in money. As a result, we don’t need to have coverage to help us financially if the worst happens.
Now, the idea of buying life insurance for children is to ensure that they are covered, as whole life cover for children can be purchased at a low cost before they become adults – and ideally, before they develop pre-existing conditions. But this only works if the policy remains in place throughout their childhood and if they choose to continue coverage for life as adults. This is usually not the best move, as term life policies are more affordable and offer all the coverage most people need.
Since we don’t want to pay premiums for decades on a whole life policy that we don’t need to protect our finances and that we don’t think our son or daughter will want to keep as adults, there’s no reason to buy insurance life for our children.
Should you get life insurance for your children?
After all, for most people, buying life insurance for children may not be necessary. It’s not necessarily a bad thing to have a small policy that can cover funeral expenses if tragedy strikes, but buying a large whole life policy would make little sense for people with no income who could buy their own at – term life cover available later.
Of course, everyone has to do what is right for their own family situation. But in many cases, others will also find, as we did, that buying life insurance for their children just doesn’t make financial sense.
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